M/S. Falcon Tyres Limited vs State Of Karnataka And Others

The Supreme Court held that rubber, processed into sheets, does not qualify as 'agricultural produce' under Section 2(A)(1) of the Karnataka Tax on Entry of Goods Act, 1979, and thus is not exempt from entry tax as per the Second Schedule. The Court affirmed the Tribunal's decision that the processing of rubber does not change its character as caoutchouc, but clarified that the definition of agricultural produce excludes rubber. The appeal was dismissed, upholding the tax liability on the appellant for the assessment year 1996-97.